Business

Friday October 16, 2009

SILK shares succumb to profit-taking after 3-day gains

By YEOW POOI LING


PETALING JAYA: Shares in SILK Holdings Bhd finally succumbed to profit-taking yesterday, declining 3.5 sen to 46.5 sen, after surging for three consecutive days.

Since Monday, the stock had gained more than 100%, the highest level in two years, after the company announced that its financial restructuring plans were completed upon the conversion of the redeemable convertible unsecured loan stock-A (Rculs-A) and the issuance of Rculs-B for the acquisition of AQL Aman Sdn Bhd on Wednesday.

As part of the exercise, the par value of the shares was reduced to 25 sen effective Tuesday from 50 sen previously.

SILK’s subsidiary, Sistem Lingkaran-Lebuhraya Kajang Sdn Bhd, is the concessionaire of the 37km Kajang SILK Highway, the concession period of which ends in 2037.

The company fell under PN17 in 2006 due to its inability to service its debt obligations as the traffic volume at the expressway was still below critical mass.

Early last year, Datuk Mohammed Azlan Hashim and Johan Zainuddin Dzulkifli, via their company, Infra Bumitek Sdn Bhd, emerged as the new majority shareholder.

Azlan, currently executive chairman of SILK, led the bulk of the restructuring exercise, including the acquisition of AQL, which is involved in marine support services in the oil and gas sector.

Besides SILK, three other companies that were lifted out of PN17 this year are Pan Malaysian Industries Bhd (PMI), Merge Energy Bhd and Airocom Technology Bhd.

PMI, which has about 20% interest in Malayan United Industries Bhd, is still loss-making although its balance sheet has improved following the completion of its restructuring in January.

Debt levels have also reduced significantly to RM129mil for the financial year ended March 31, 2009 (FY09) from RM716.6mil in FY03.

Merge, meanwhile, did not undertake a restructuring after it applied to the exchange to consider the company under the enhanced framework of PN17 and to uplift the status.

The water-related company remains profitable although net profit has been on a declining trend over the past four quarters.


SILKHLD : [Stock Watch] [News]


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